Bridging Loans Pulled Off Market


#1

For those who do not know about it these are special ( and expensive at about 8 or 9%) second mortgages granted while you get rid of your house. You temporarily have 2 gaffs .

EG.

Ladderista spots ‘must have house’ , simply georgeous fell in love stuff .

Ladderista has apartment worth €250k and outstanding mortgage of €150k , house costs €350k .

Ladderista gets bridging loan , this is swapped with mortgage on existing …although it is a mortgage of sorts.

Therefore Ladderista temporarily owes bank €150k BRIDGING on original gaff and €350k mortgage on new gaff . Total €500k .

Ladderista sells apartment , gets the €250k . Bridging is paid off in full and the €100k goes into new house mortgage .

Ladderista now has mortgage of €250k on house, only .

EXCEPT , **The banks have largely stopped giving bridging finance save where the bridging is 25% or less of the value of the original property.
**

Logjam on the Ladder. Whoops. Better sell first .


#2

very significant news…


#3

Indeed, no more casual house shopping at the weekend with a call to the bank on a Monday for a bridging loan.

People may now actually have to put a bit of dosh away :open_mouth:


#4

I don’t doubt you 2Pack, but can you point to a source for this?


#5

My ‘Trade’ Contacts as is often the case !

Ring up a broker and ask them for a bridging and mortgage package based on the numbers in my first post and an income of €60k , 5 years in job not civil service and no bonuses.

Remember the outturn after I Ladderista my way out of the shoebox is that

I SHOULD end up with an LTV of about 72% and
I SHOULD end up with an income multiple of 4.16 ( 4 x 60 = €250k)

AFTER the bridging is paid back…and ASSUMING I can get bridging to make the deal work.

The problem is that I will have a combined Bridging and Mortgage of €500k on an income of €60k, thats 8.5x income multiple.

Bet they say no!


#6

Ok so lets see who they have removed from the market.

No more 100% mortgages: FTB with no savings, or who are in deep debt
No bridging loans: STBs and above who want to move up before they have sold on.

So now only people with 50k to 100k tucked away or people who have already sold their previous house can buy…

Soon they will only loan you money you have deposited with them.


#7

STR’s … who were smart enough to sell at/near the peak. I’m sure they will now be guided by the good shepherd Donie’s advice and carry out their duty to buy.


#8

As it was years ago…
Granda (PBHN) always used to say that by the time you satisfied the bank that you were worthy of borrowing you wouldn’t need the money.


#9

That is the case with developers who have pony up a deposit of 50% of the loan amount as security i.e. show that you don’t really need the loan before they will grant the loan?


#10

In a bit of a dilemma, we’re trading up, sale agreed, short chain (were in the middle of 3 houses - we have cash buyer) and will have approx 60k equity.

We should be able to get access to our new house on contract signing to start work but need a lot of that equity to pay for it - whats the story with bridging finance of the order of €45k for 3 months?

Otherwise we need to rent somewhere while the work is going on…


#11

Credit Union? I think 30 is their limit.


#12

There is a crowd in Santry who do bridging finance now. Capital Flow.


#13

Thanks, I looked them up - seems they start at amounts > 250k where I want about 45k.